Scarcity of Erskineville sites sees strong investor demand

13 March 2018

The growth in the Sydney residential market continues to make it difficult for students and middle aged people to live in close proximity to the Sydney CBD. The cost of living is now $600 per week for 1 bedroom apartments and this has made affordable living accommodation a much more appealing prospect.

According to David Hickey, Sales Executive of Metro and Regional Sales at Savills Australia, “Current affordable housing operators and owners are having zero issues letting rooms on a longer term basis, as the security of income is making it an attractive prospect for investors and developers alike.”

Mr Hickey went on to say that DA approved boarding houses are scarce because councils face strong opposition through the approval process from surrounding residents.

Erskineville, the Inner South West suburb of Sydney is just one example of an area dominated by attached housing, so it is extremely rare to find a suitable site, especially as Heritage conservation zones dominate most of Erskineville/Newtown prohibiting full demolition. Low height/FSR controls are also in place to preserve the area’s heritage, ensuring modern housing will always be in very scarce supply.

In light of this, one of the largest blocks in Erskineville is set to hit the market this month through Savills Australia, on behalf of a private investor.

Located at 12 Albert Street, the 450 square metre site boasts 15 metres of street frontage and is conveniently located within 400 metres from three train stations (Newtown, Erskineville & Macdonaldtown) and is a short walk to nearby entertainment centres, food and cultural precincts.

The property is exclusively for sale through David Hickey and Nick Tuxworth of Savills Australia who said the City of Sydney Council is keen to promote properties with access to such amenity.

“Due to quantum value, leasing demand and low risk/low construction costs, we are experiencing high levels of enquiry for this asset class,” said Mr Hickey.

The property is just 80m to Woolworths, 150m to cafes, Erskineville village shops, 300m to King Street in Newtown, 400m to a choice of three train stations (Newtown, Erskineville and McDonaldtown) and 900m to The Enmore Theatre.

Currently, the property presents as a modernised five bedroom house with off-street parking and has the capacity to be rented out for $1,300 per week. The existing tenants are on a temporary discounted rent and have agreed to allow the owner access to bring consultants through at short notice and will move out when building commences.

According to Nick Tuxworth, Associate Director of Metro & Regional Sales at Savills Australia, “Current DA approval does not take full advantage of the zoning (FSR 1.1 vs maximum allowable 1.5:1 after bonus 0.5 for boarding house) and there is an opportunity to lodge modified plans with additional rooms (STCA).”

According to Mr Hickey, the Construction Certificate is nearly ready, the Engineers drawings are complete and included in sale (Structural, Mechanical, Hydraulic, Electrical, Stormwater, Fire), the Fire engineer’s report and strategy has been accepted by PCA and archival photographic records and traffic management plan is completed.

“This site would be a simple build, as there is no basement or lift and there are minimal fire safety measures required. The purchaser could expect around $400,000pa gross rent with a depreciation allowance of approx. $75,000pa.

“As there is strong demand from investors chasing yields, there is the opportunity to hold this asset for the long term cash flow or on sell the finished product to investors,” he said.

The property is on a quiet, low-rise street with little through traffic and is next door to Green Bans Park and only has one other neighbour so many of the current rooms offer park and district views.

“This site is perfectly situated on the border of Erskineville and Newtown and is the closest you can be to cosmopolitan Newtown whilst still enjoying the village atmosphere of Erskineville,” said Mr Hickey.

Erskineville is just 3.7km to Sydney Town Hall and 4.8km to Sydney Airport and is within close proximity to Sydney University, Australia Technology Park and Broadway Shopping Centre, to name a few.


Key Contacts

David Hickey

David Hickey

Sales Executive
Metropolitan & Regional Sales

Savills Sydney

+61 (0) 2 8215 6074


Nick Tuxworth

Nick Tuxworth

Associate Director
Metropolitan & Regional Sales

Savills Sydney

+61 (0) 2 8215 6087